Trying to Get Out of Debt

Updated on
October 18, 2008

H.M.
asks from
Argyle, TX
on October 12, 2008

18
answers

Does anyone out there have personal experience with trying to getting out of credit card debt? I was wondering if I should consolidate them, but not sure who to go through for this. I don't want to ruin my credit. I have heard that some consolidation companies can do just that. So if anybody has any suggestions, I would appreciate it. Thanks.

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M.B.

answers from
Dallas
on
October 13, 2008

Look at daveramsey.com

Dave has a whole set of getting out of debt rules and budgeting advice. He has a radio show on every afternoon from 1(or 2?) to 4 on 570 AM. He takes calls from people about their finances and debt and gives advice. He has great advice about getting to the root of debt problems and he advises against CON-solidation programs. He says they often are one of the biggest financial mistakes that people make.

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T.O.

answers from
Dallas
on
October 15, 2008

PLEASE CALL ME. I've been through this. 3 yrs. ago I was in $70,000 debt. and now I'm at the tail end of it. I also have been there before and did it then as well. I am a 55 yr. old single female that is self- employed. T. O'Connor ###-###-####

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N.G.

answers from
Dallas
on
October 13, 2008

H.,
I agree with what has already been suggested.
We have been doing the "Dave Ramsey" program. Many churches offer his "Financial Peace University" program and offer childcare as well. Its a once a week seminar. My husband and I are doing his on-line program (that works better for us). It's great becuase it really breaks everything down into small chunks. I found that looking at all the debt was really overwhelming. The premise is to basically budget (his on line software as part of the signing up for the year makes this really easy), go to a cash only basis and you start paying off your smallest debt first (snowball debt payer). It was also a really good way for my Husband and I to come together on a financial plan. It has stopped any arguing over money and given us both peace of mind. I've already got 2 cards paid off (within 3 months) and feel like we are suceeding where we have failed in the past. It has also helped us discipline our spending quite a bit.
If you do the 1 year on line program you get his book, the online softward and his envelope organization stuff. But I've known many who do the seminar and love it. A guy I work with and has been doing it is completely out of all debt and owns his home free and clear. I highly recommend it.Good Luck!

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L.D.

answers from
Dallas
on
October 12, 2008

We are paying ours down by using the snowball method. You take the one with the highest interest rate and pay as much as you can on it each month, at least three times the minimum payment if you want to get out the debt quickly, and the minimum balance on any other cards you may have. When the first one is paid off, you take the amount you have been paying in the highest interest card and roll it over the the next highest interest card. You will really see some progress!!! Also, cut up all your cards but one for emergencies an leave it at home. When you pay off a card, get rid of the card but do not close the account. You want to have available credit because that looks good on your credit score. Good luck to you!

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C.H.

answers from
Dallas
on
October 12, 2008

I did the same as the other response. I think I paid of almost 7,000 in a little over a year. You have to be consistent and pay the same amount every month but it does work.

EDIt
I did forget to tell you that when I paid off my card they did cut my credit limit by like 60% on some of the cards, and others just closed the account. I didn't really care because I try to pay cash for everything but you may want to make sure they don't do this to you to make sure your credit score doesn't change.

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M.H.

answers from
Dallas
on
October 13, 2008

Getting out of debt is hard work (and not fun). For most people getting out of debt means major lifestyle changes and cut backs. But it is so worth all the work. There is a freedom when you control your money and not money controlling you. Dave Ramsey has books (I am sure you can get them in the library) and a radio talk show. I would read and listen to as much Dave Ramsey as possible. He will help you and encourage you. You are doing a great job.

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D.C.

answers from
Dallas
on
October 13, 2008

First figure out what you can pay per month. Then talk to each credit card company about lowering your interest rate or if you are way into debt: putting a freeze on the use of the card and lowering the rate. If you have more than one or two cards concentrate on paying off the one with the highest interest rate first with extra payments on the principle (you will probably have to specify that the extra money is to go to the principle). It takes time and self-discipline, but you can do it. The experience we've had with consolidation companies is they can't do much more than you can.

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D.H.

answers from
Dallas
on
October 13, 2008

H.,
I too recommend Dave Ramsey. We have been on his Total Money Makeover plan for 2 years and are debt free - it can be done! His plan will totally change your life. His book is wonderful and I am a faithful listener to his radio show (AM 570 from 1-4 pm weekdays or you can listen online at daveramsey.com). The radio show kept me motivated when we were paying off our debt.
Good luck!
D.

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L.B.

answers from
Dallas
on
October 13, 2008

Here's another vote for Dave Ramsey. We've been following his program for a year and have made a big dent in our debt. It's taking time, but it's a great feeling to be rid of some of these bills! Good luck in your efforts!!

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A.K.

answers from
Dallas
on
October 13, 2008

Just another encouragment to check out Dave Ramsey's system for getting out of debt! He's awesome & it works. Way to go!!!

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S.J.

answers from
Dallas
on
October 13, 2008

It's already been mentioned.. Dave Ramsey. He will break it down, step by step, and in the proper order. I found it easier to listen to his audio CD's vs reading. I have the Total Money Makeover CD's.

Also, if your credit is NOT bad yet..(late payments) CALL your credit card companies and ask them to reduce your interest rate. I did. I called all 5 - and 4 of them cut my rate by at least 25%. I basically said the interest rate was too high and can they reduce it?, and they would a little bit, and then I said that it was still to high for me to keep the card, that I had other cards with lower interest rates that I would be using instead, and could they cancel this card please? and then they cut it some more :) and so I agreed to keep. I try to almost never use them though.

Good luck to you. Know that you are in good company (Most of America) so don't be so hard on yourself. You obviously have lots of good advice, (esp the poster who mentioned Internet, Cable and Cell Phone bills) and it CAN be done. Listen to Dave on the Radio and hear for yourself, it should motivate you!

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L.C.

answers from
Dallas
on
October 13, 2008

Hi H.!

Many people have already recommended listening to or reading Dave Ramsey. I need to echo that recommendation as well. His whole purpose is to teach people how to get out debt by living within their means and being willing to sacrifice. He believes passionately in financial freedom, and so do I. His radio show is on daily from 1 pm to 4 pm on 570 am. I do not have cable, but apparently he has a show on the Fox business network in the evenings. His website can give you the time. His website is: www.daveramsey.comHe has two books: The Total Money Makeover and Financial Peace. You can get them at any bookstore. You can also sign up to take a class with other people in similar situations as yours. Check out his website for details on the Financial Peace University class.

Someone else mentioned not to consolidate debt. This is true. You do not want to got through a company when you are capable of doing the exact same thing for yourself.

I have been living on a budget since 2001, and I am budget junkie! Contrary to what people may think about budgets, they really do provide a sense of freedom once you get one established. They are not constrictive at all except to remind you not to spend more than you make.

If you would like help on how to get on a budget and how to tackle your debt, then I would be happy to help and/or connect you with a budget counselor (free) who can help as well.

Lisa :)

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C.G.

answers from
Dallas
on
October 13, 2008

I agree with everyone else. You have to try daveramsey.com. It really works.

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G.M.

answers from
Dallas
on
October 13, 2008

I have been using Dave Ramsey's plan. He is on AM talk radio from 1-3pm KLIF I believe it is.
Also on the fox network in the evenings. He has a book called the Total Money Makeover.
Great ideas, and a real plan. Get committed and go for it!
G.

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T.P.

answers from
Dallas
on
October 13, 2008

I was advised by a lawyer NOT to consolidate my debt. He said that companies are more likely to "forgive" a small debt that a larger debt.

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L.L.

answers from
Dallas
on
October 18, 2008

I am currently taking Financial peace university--it is the best $100 I ever spent. Go look up Daveramsey.com
He has very strong ideas about how to deal with debt.
good luck--love, L.

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C.B.

answers from
Dallas
on
October 13, 2008

Hi H.,

I think our country, especially middle and upper-middle class families, are going to have to take a good hard look at the spending habits we have engaged in for the past ten years and accept some cold hard truths. I am in the same boat as you--thousands of dollars in credit card debt AND soem students loans as well. One thing we have to do is stop blaming the state of our country on the politicians and the banks and accept some of the responsibility. The average famly has anywhere from $300-$500 in expenses that they didn't have 10 years ago. I'm not talking about high food and gas prices, but these new monthly bills that have been necessities that really aren't, like cell phones, internet, and cable, dish, or DSL. I know we are all thinking, "but my cell phone is a necessity...how would my husband/children/the school reach me?" Well, we all got along without cell phones forever and people were able to get ahold of us before. Same thing with internet and cable. And Starbuck's. I think what we have to do is to take control of our lives again instead of being a part of this huge pack of mindless spenders. Okay, I do not mean to preach, but the bottom line is you have to stop spending your money and pay back the money you already spent, which you didn't even have in the first place! How much do you pay for cable, dish, or DSL? Could you put that towards a creidt card every month?

Out big debt started 8 years ago when my first son was born and I quit my job to stay home. If you are at home you have to really watch the money--and it is going to be YOU, not your husband, that does it.

I have heard two strategies--may off the highest interest rate credit cards, or start with the card with the smallest balance and pay that off. When you have your card paid off and you see that balance of ZERO it is a huge motivator! Department store credit cards are always the highest interest. And like others have said, but them up. If you have more than 10 or so I would close a few accounts, but always have a major one (visa or Mcard) open for emergencies. Go on a cash only basis or use a debit card rather than a credit card. For the first time in my life I am buying groceries at WalMart instead of Tom Thumb or Whole Foods. We used to eat out once a week-now it is once a month. My husband and kids brown bag it instead of buying lunch. And breastfeed as long as you can! That saves lots of money of formula! :)

Good luck. We all need it now with what is happening in the economy.

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T.

answers from
Dallas
on
October 13, 2008

Check out daveramsey.com for a common sense, practical plan for getting out of debt. You can also listen to Dave live on KLIF (570 AM radio) every day from 1-4 pm. He also has several books that I would highly recommend on getting out of debt, living on a budget, and planning for the future. Good luck! You can do it!